Bus 640 Final Essay examples

2479 Words Aug 5th, 2013 10 Pages
Blockbuster’s lack of blockbuster
Frankie L. Jones
February 11, 2013

BUS: 642
Thomas Hennefer

Abstract
Blockbuster video, the once dominant force behind consumers’ movie rental needs has suffered a significant loss in revenue to the rise of RedBox and Netflix. The competitive advantage offered by the two companies has tapped into Blockbuster’s market and cause a lack of blockbuster for the company. Since 2009 the company has continue to reported decreased revenue and profits against its competitors. In 2010 the company filed bankruptcy and has since then implemented new services and products similar to its competitors, however, customer’s still prefer RedBox and/or Netflix.

Once upon a time on a Friday night after work, you
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Reported Revenue
In 2009 Blockbuster was still among the top two competitors for consumers’ movie rental needs. RedBox was establishing a foundation and surpassing forecasted expectations every year, while Netflix accumulated revenue between $1.63 billion to $1.67 billion, which was about $30 billion more than Blockbuster.

2009 Total Revenue for Blockbuster, RedBox, and Netflix

Blockbuster's market capitalization had dropped 47 percent to $62 million in 2009; Netflix's had shot up 55 percent to $3.9 billion that year (Chopra & Veeraiyan 2010).
According to Blockbuster’s financial reports for fourth quarter 2009, total revenues were $1.08 billion as compared to total revenue of $1.31 billion for the same period in 2008, and gross profit was $540.4 million. Blockbuster ended the fourth quarter of 2009 with $188.7 million in cash and cash equivalents and $58.5 million in restricted cash related to the Company's letters of credit. According to Blockbuster’s financial reports for first quarter 2010, total revenues for the first quarter of 2010 were $939.4 million, compared to total revenues of $1.09 billion for the same period in 2009, and gross profit was $502.2 million. Blockbuster ended the first quarter of 2010 with $109.9 million in cash and cash equivalents. The company filed for bankruptcy on September 23, 2010. Fritz (2001) wrote an article on Blockbuster’s bankruptcy, and reported

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